Entity Reorganization

Longview has the ability to perform adjustments to the financial statements when there is an organizational change that requires an entity to report to a different hierarchy while keeping prior data associated with the original reporting hierarchy. This process is achieved through the Entity Reorganization application.

Entity reorganization is a process that assists in realizing the following reporting requirements:

• An entity is being moved from one parent to another within a hierarchy, and
• The previous parent must retain the results of the entity being moved up to the point of the reorganization.

Preparing for an entity reorganization

In order to use the entity reorganization app, your Longview system must be prepared to achieve the correct results.

To prepare an entity for reorganization:

• Your Longview system must contain all exchange rates.
• Your Longview system must be fully recalculated.
• The entity to be reorganized must contain no source data for the current period.

Entity reorganization - overview

When an organizational change requires an entity to report to a different hierarchy, the Longview System Administrator must perform the entity maintenance prior to running the entity reorganization process. This maintenance includes:

• Renaming the original entity (for example, OLD_E11110)
• Creating the new entity with the same name as the original entity (i.e.: E11110) and attaching it to its new organizational hierarchy.

  Note: You can use the duplicate function in Application Administrator to create the new entity with the same settings as the original entity. The new parent can be adjusted in the Parents tab.

Once the hierarchical maintenance has been performed, the entity reorganization process can be used to automate the adjustments necessary to report prior and going forward data in different reporting hierarchies. This provides the ability to:

• Report prior data in the original reporting structure.
• Report current and future data only in the new reporting structure.
• Automate adjustments to support financial statements, foreign currency translation and eliminations.

Automated adjustments performed by the entity reorganization process include:

• Copying and reversing the income statement data as required.
• Adjusting Retained Earnings to ensure the balance sheet is in balance
• If using foreign currency translation, adjusting CTA to ensure the balance sheet is in balance.
• Copying and reversing the intercompany schedule data as required.

  Note: If either the source or target entity selected during the Entity Reorganization process is not configured for eliminations (i.e.: symbol attribute ZElimAllowICTransactions is set to FALSE), all intercompany schedule data adjustments will be skipped.

• Adjusting the Cash Flow calculation basis for the new entity to avoid showing the first month’s data as a real change in cash.

  Note: Partial ownership entities (those using the NCI or Equity Pick Up calculations) may require manual adjustments to complete this process.

Accessing entity reorganization

1. Select the Consolidate module.
2. Select the Administration category.
3. Expand Entities.
4. Click Entity Reorganization. The Entity Reorganization dialog appears.

Reorganizing an entity

The Entity Reorganization dialog displays and provides the following options:

1. Select the source (old) entity.
2. Select the target (new) entity.
3. Click OK. the required calculations will run to reorganize the selected entity.